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The Gist
A daily dose of market updates and smart investment strategies to guide your portfolio decisions
Today's Report
Your Morning Fix
- Donald Trump said he would suspend strikes on Iran’s energy facilities for 10 days amid ongoing talks, though Tehran rejected the US peace proposal as biased and unfair.
- Russia has warned it may reintroduce a gasoline export ban if necessary to stabilize domestic fuel supplies and prices amid global energy market volatility.
- The Bangko Sentral ng Pilipinas held its policy rate steady at 4.25% in an unscheduled meeting to reassure markets amid economic worries linked to the Middle East conflict.
- The Energy Regulatory Commission temporarily suspended electricity spot market trading to ease soaring prices projected to reach PHP 9 per kWh during the ongoing energy crisis.
- The peso weakened to PHP 60.23 per dollar on Thursday, slipping 13 centavos as Middle East war uncertainty kept markets cautious while awaiting signs of de-escalation.
Our Portfolio Recommendation
Our peso portfolio is overweight on fixed income to manage risks from geopolitical-driven oil prices and inflation. We favor the 3-to-7-year curve for flexibility. Our stance on local equities is neutral due to elevated uncertainty, with a focus on stable sectors like telecommunications and utilities. The dollar portfolio maintains a neutral position across both fixed income and equities as the US–Iran crisis keeps yields high and the US Fed remains hawkish. We favor shorter-duration bonds to limit volatility and prefer defensive global equity names in utilities and industrials, while advising a reduced exposure to emerging markets hit by current tensions.
| 2025 Actual | 2026 Metrobank Forecast | 2027 Metrobank Forecast | |
|---|---|---|---|
| GDP | 4.4% | 4.5% | 6.0% |
| Inflation | 1.7% | 5.3% | 3.0% |
| BSP Target Reverse Repurchase Rate | 4.50% | 4.75% | 4.25% |
| Federal Funds Rate | 3.75% | 3.50% | 3.50% |
| USD/PHP | 58.8 | 61.3 | 58.5 |
CHART OF THE DAY
Chart of the Day
BSP maintains policy rate in off-cycle meeting
The Bangko Sentral ng Pilipinas (BSP) kept its policy rate at 4.25% in an off‑cycle meeting prompted by geopolitical uncertainty and rising global price pressures. This also compelled the central bank to raise its inflation forecasts for 2026 and 2027. BSP Governor Eli Remolona Jr. emphasized that current inflation is driven by supply‑side shocks, limiting the effectiveness of monetary policy, and warned that a rate hike now could hamper economic growth.. Sources: Bloomberg, BSP
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USD/PHP edges higher amid inflation revisions
- The USD/PHP exchange rate opened 10 centavos higher at 60.20 on Thursday, after oil prices and the dollar advanced overnight.
- The pair stayed within the 60.20–25 range for most of the day due to the lack of strong catalysts while US–Iran negotiations continue.
- The peso briefly strengthened to 60.15 after the Bangko Sentral ng Pilipinas (BSP) raised inflation expectations, but the pair later rebounded to 59.275 following remarks about expected growth recovery and possible Reserve Requirement Ratio (RRR) cuts in the second half.
- The USD/PHP exchange rate ultimately closed at 60.23, or 13 centavos higher day-on-day.
- The current support levels of USD/PHP are 59.70/60.00, while the resistance levels are 60.40/61.00.
READ MORE
Improved liquidity seen in local GS market
- Conflicting US–Iran statements kept oil prices elevated, but local markets saw improved liquidity and emerging support on Thursday.
- Risk sentiment strengthened after an off‑cycle BSP Monetary Board meeting, where regulators chose not to hike rates.
- The decision sparked heavy buying, especially in the 3‑year RTB 5‑18, which rallied by 7.5 basis points (bps) to 6.475%.
- Benchmark yields closed 5–10 bps lower, with some illiquid bonds dropping as much as 43 bps.
- Market direction remains driven by Middle East headlines, while investors now watch the BSP more closely amid currency pressures and inflation concerns.
READ MORE
PSEi drops below 6,000 amid broad weakness
- The Philippine Stock Exchange index (PSEi) ended 59.97 lower at 5,984.20 on Thursday, failing to hold above the 6,000 level.
- Most of the sectoral indices closed lower, led by Financials (-1.36%), and followed by Property (-1.28%), Services (-1%), Conglomerates (-0.42%), and Industrials (-0.35%). Meanwhile, Mining & Oil was the sole gainer as it rose 1.14%.
- On the stock side, Monde Nissin Corp. (+3.02%), GT Capital Holdings Inc. (+1.18%), Manila Electric Co. (+0.99%), Aboitiz Equity Ventures Inc. (+0.68%), and Puregold Price Club Inc. (+0.25%) led the gainers.
- Meanwhile, DigiPlus Interactive Corp. (-4.60%), Century Pacific Food Inc. (-3.96%), DMCI Holdings Inc. (-2.97%), SM Prime Holdings Inc. (-2.33%), and Metropolitan Bank & Trust Co. (-2.21%) weighed heavily on the index.
- Value turnover stood at PHP 4.23 billion, while overseas funds were net sellers at PHP 135.29 million as they accounted for 40% of volume.
READ MORE
USD/PHP edges higher amid inflation revisions
- The USD/PHP exchange rate opened 10 centavos higher at 60.20 on Thursday, after oil prices and the dollar advanced overnight.
- The pair stayed within the 60.20–25 range for most of the day due to the lack of strong catalysts while US–Iran negotiations continue.
- The peso briefly strengthened to 60.15 after the Bangko Sentral ng Pilipinas (BSP) raised inflation expectations, but the pair later rebounded to 59.275 following remarks about expected growth recovery and possible Reserve Requirement Ratio (RRR) cuts in the second half.
- The USD/PHP exchange rate ultimately closed at 60.23, or 13 centavos higher day-on-day.
- The current support levels of USD/PHP are 59.70/60.00, while the resistance levels are 60.40/61.00.
READ MORE
Improved liquidity seen in local GS market
- Conflicting US–Iran statements kept oil prices elevated, but local markets saw improved liquidity and emerging support on Thursday.
- Risk sentiment strengthened after an off‑cycle BSP Monetary Board meeting, where regulators chose not to hike rates.
- The decision sparked heavy buying, especially in the 3‑year RTB 5‑18, which rallied by 7.5 basis points (bps) to 6.475%.
- Benchmark yields closed 5–10 bps lower, with some illiquid bonds dropping as much as 43 bps.
- Market direction remains driven by Middle East headlines, while investors now watch the BSP more closely amid currency pressures and inflation concerns.
READ MORE
PSEi drops below 6,000 amid broad weakness
- The Philippine Stock Exchange index (PSEi) ended 59.97 lower at 5,984.20 on Thursday, failing to hold above the 6,000 level.
- Most of the sectoral indices closed lower, led by Financials (-1.36%), and followed by Property (-1.28%), Services (-1%), Conglomerates (-0.42%), and Industrials (-0.35%). Meanwhile, Mining & Oil was the sole gainer as it rose 1.14%.
- On the stock side, Monde Nissin Corp. (+3.02%), GT Capital Holdings Inc. (+1.18%), Manila Electric Co. (+0.99%), Aboitiz Equity Ventures Inc. (+0.68%), and Puregold Price Club Inc. (+0.25%) led the gainers.
- Meanwhile, DigiPlus Interactive Corp. (-4.60%), Century Pacific Food Inc. (-3.96%), DMCI Holdings Inc. (-2.97%), SM Prime Holdings Inc. (-2.33%), and Metropolitan Bank & Trust Co. (-2.21%) weighed heavily on the index.
- Value turnover stood at PHP 4.23 billion, while overseas funds were net sellers at PHP 135.29 million as they accounted for 40% of volume.
READ MORE